I see that several governments are charging or thinking of charging tax on Bitcoin gains. I know that in the domain name industry several registrars and domain name sellers accept Bitcoin as a payment method. I am one one of them, and I am far from unique. I'm thinking of quoting domain name prices in Bitcoin to remove the currency equivalent. So that raises two questions. Will this help the buyer to save tax? Is this an incentive to buyers to switch investments from one appreciating asset into another?
Thats possible as long as bitcoin stays in the bitcoin and over the internet. I mean if user, the end user when buys or sells something over the internet and when he gets the money cashed out to bank account then it will be taxed for sure because it is in the bank account and at the end of financial year you will have to show up with the tax department if the amount of money that was raised or funded into your account was noticeable enough!
At least in India this is the thing we have to follow. Though the system here is not meant for bitcoin in anyway but IT department can easily raid the account and seal it if no tax info is provided for the foreign transaction, and here the foreign transaction is bitcoin itself.